Nvidia, AMD Find Favor Again With Cathie Wood: Here Are Key Support, Resistance Levels Priced In By Options Market This Week

Cathie Wood-led ARK Investment Management began the week by loading up on shares of NVIDIA Corporation NVDA and Advanced Micro Devices, Inc. AMD.

New commerce department rules indicate chipmakers should agree not to increase capacity in China for a decade in order to receive money from a $39 billion federal fund designed to build a leading-edge US semiconductor industry, according to an FT report.

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Some of these stocks have gained significantly, with Nvidia up over 62% and AMD shares gaining over 22% since the beginning of 2023. However, the pertinent question is how long will this rally last. Here's a look at how the options market is pricing in their potential trading range for the week.

1. NVIDIA Corporation: The stock closed at $232.16 on Monday. Options expiring on Friday show the build-up of maximum open interest at the $240-Call strike, indicating the level to act as a stiff resistance until Friday. Strong supports for the stock exist at the $220 and $230 levels as indicated by open interest build-up on the out-of-the-money Put options.

2. Advanced Micro Devices: The stock closed at $78.58 on Monday. Options expiring on Friday show maximum open interest build-up on the out-of-the-money Call side at the $80 level. This indicates the stock is likely to face stiff resistance at this level by Friday. The $72 level is likely to act as strong support for the stock this week as is reflected in the open interest build-up in out-of-the-money Put options.

It is noteworthy that open interest levels only provide a fair indication of support and resistance levels. Any major news or macro event may likely cause significant movement in stock prices that may lead to a change in the open interest levels.

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